Pretoria - The Consumer Price Index (CPI) remained unchanged at 5.9% year-on-year in October, Statistics South Africa (Stats SA) said on Wednesday.
“This rate was the same as the corresponding annual rate of 5.9% in September 2014. On average, prices increased by 0.2% between September 2014 and October 2014,” said Stats SA.
CPI, which is used to measure inflation, was within the Reserve Bank’s target range of 3-6% in October band was in line with market expectation.
The food and non-alcoholic beverages index increased by 0.2% between September 2014 and October 2014. The annual rate decreased to 7.8% in October 2014 from 8.5% in September 2014.
The alcoholic beverages index increased by 1.9% between September 2014 and October 2014. The annual rate increased to 6.3% in October 2014 from 5.3% in September 2014.
The transport index increased by 0.3% between September 2014 and October 2014. The annual rate increased to 4.8% in October 2014 from 4.2% in September 2014.
“This is its second consecutive month below the Reserve Bank's 6% upper target limit after 6 months of above target prints. The biggest drivers of the annual figure were food and non-alcoholic beverages, housing and utilities and miscellaneous goods and services,” said Nedbank economists.
Inflation is seen as likely to remain relatively contained in the coming months on the back of lower commodity - especially oil and food - prices.
“The volatile rand though does pose an inflation risk and we might start seeing the effects of the rand coming through in the numbers further on in 2015. We have pencilled in a 0.25% rate hike for tomorrow afternoon, but today's consumer inflation figures decrease that probability. However, much still depends on the trajectory of the currency, which remains extremely vulnerable given the country's large twin deficits and the anticipated changes in global monetary policies,” said Nedbank.
The Reserve Bank’s Monetary Policy Committee will tomorrow make public its decision on rates. - SAnews.gov.za
